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INVESTMENT IN AMAK
 6 Months Ended
Jun. 30, 2016
INVESTMENT IN AMAK [Abstract]  
INVESTMENT IN AMAK
16. INVESTMENT IN AMAK

As of June 30, 2016, and December 31, 2015, the Company had a non-controlling equity interest (35%) in AMAK of approximately $54.9 million and $47.7 million, respectively. This investment is accounted for under the equity method. There were no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at June 30, 2016.

AMAK’s financial statements were prepared in the functional currency of AMAK which is the Saudi Riyal (SR).  In June 1986 the SR was officially pegged to the U. S. Dollar (USD) at a fixed exchange rate of 1 USD to 3.75 SR.

The summarized results of operation and financial position for AMAK are as follows:

Results of Operations

  
Three Months Ended June 30,
  
Six Months Ended June 30,
 
  
2016
  
2015
  
2016
  
2015
 
  
(Thousands of Dollars)
 
Sales
 
$
610
  
$
13,283
  
$
9,602
  
$
18,584
 
Gross profit (loss)
  
(3,000
)
  
1,034
   
(2,809
)
  
2,746
 
General, administrative and other expenses
  
2,043
   
3,036
   
4,189
   
5,538
 
Loss from operations
 
$
(5,043
)
 
$
(2,002
)
 
$
(6,998
)
 
$
(2,792
)
Gain on settlement with former operator
  
9,195
   
-
   
25,421
   
-
 
Net income (loss)
 
$
4,152
  
$
(2,002
)
 
$
18,423
  
$
(2,792
)

Gain on settlement with former operator of approximately $9.2 million during the three months ended and $25.4 million during the six months ended June 30, 2016, relates to a settlement with the former operator of the mine resulting in a reduction of previously accrued operating expenses and recognition of spare part inventory.

Depreciation and amortization was $2.4 million and $5.9 million for the three months and $5.1 million and $11.0 million for the six months ended June 30, 2016, and 2015, respectively.  Therefore, net income before depreciation and amortization was as follows:

  
Three Months Ended June 30,
  
Six Months Ended June 30,
 
  
2016
  
2015
  
2016
  
2015
 
  
(Thousands of Dollars)
 
Net income before depreciation and amortization
 
$
6,223
  
$
3,903
  
$
23,201
  
$
8,223
 

Financial Position

 
June 30,
  
December 31,
 
 
2016
  
2015
 
  
(Thousands of Dollars)
 
Current assets
 
$
18,746
  
$
26,078
 
Noncurrent assets
  
263,446
   
259,527
 
Total assets
 
$
282,192
  
$
285,605
 
         
Current liabilities
 
$
2,654
  
$
22,740
 
Long term liabilities
  
87,935
   
89,364
 
Shareholders' equity
  
191,603
   
173,501
 
  
$
282,192
  
$
285,605
 

The equity in the income or loss of AMAK reflected on the consolidated statements of income for the three and six months ended June 30, 2016, and 2015, is comprised of the following:

  
Three months ended
June 30,
  
Six months ended
June 30,
 
  
2016
  
2015
  
2016
  
2015
 
  
(Thousands of Dollars)
 
Company’s share of income (loss) reported by AMAK
 
$
1,464
  
$
(706
)
 
$
6,494
  
$
(984
)
Amortization of difference between Company’s investment in AMAK and Company’s share of net assets of AMAK
  
337
   
337
   
674
   
674
 
Equity in earnings (loss) of AMAK
 
$
1,801
  
$
(369
)
 
$
7,168
  
$
(310
)

See our Annual Report on Form 10-K for the year ended December 31, 2015, for additional information.